FFF Articles

George Orwell’s 1984 has arrived in the U.S.S.A. Just as in Nazi Germany in the 1930s and in Russia from 1917 to 1990, any government agent or agency in America today can confiscate or seize almost any property from any American and there is very little the citizen can do to protect himself. We are witnessing the death of property rights in America — human rights and all other freedoms will follow.

In 1984, government seizures of so-called “illegal assets” totaled $30 million. In 1991, these seizures totaled $644 million (not including IRS levies) for a net increase of 2047%. (Seizures in 1992 probably exceeded $750 million.) A total of $2.6 billion in U.S. citizens’ assets has been seized since 1985, the Government Asset Forfeiture Office proudly boasts. Eighty percent of these seizures never resulted in an arrest or conviction — indicating that most are being taken from innocent people.

According to USA Today, there are now 1,000 forfeitures per week in the U.S., or 52,000 per year. Assets seized in order of frequency are: 1) cash or other monetary instruments; 2) vehicles, boats, planes; 3) bank and brokerage accounts; 4) real estate (including your home); and 5) pension and profit-sharing plans.

Police or government seizures now pose a seemingly random — but still, very real and terrifying — threat to everything we have worked so hard to earn and save over the years. It is frightening to realize that if your teenage son or daughter hosts a party at your house, and one of the guests brings a few joints of marijuana, you can lose your entire house and everything in it under many local or state forfeiture laws. (Federal forfeiture laws will apply only if the substance is present in salable quantities.)

Asset forfeiture is an unconstitutional process (though considered legal according to new socialist laws and regulations) which allows the government or any police agency to simply “accuse” or “suspect” you of a crime (but not formally charge you) — and then seize your property. In most instances there is no arrest, no trial and no conviction. You are presumed guilty until you can prove yourself innocent. The plain fact is that the great majority of people who have property seized from them by the police are innocent and law-abiding. One study showed that in 80% of the seizures, the police never even filed charges against the victims of the seizures, or, in some cases, filed charges and then dropped them.

The police need no warrant to seize your car, your cash, your business, your house, your bank account, your investments, your retirement plan, or your personal property — and no due process. They don’t even have to formally charge you with a crime. There are hundreds of local, state and federal laws and thousands of regulations on the books under which the government can seize your property.

Furthermore . . . there’s no cap on the value of the seized assets. They can take expensive cars and homes for even the most minor “suspected” violation. You might be under suspicion of violating some statute for which the maximum penalty — if convicted criminally in a court of law — might be a $500 or $1,000 fine. But under these laws, the police or government can seize your property worth 100 or even 1,000 times as much as the maximum fine — and they don’t need to convict you to do it.

Three fraternities on the University of Virginia campus found this out the hard way when federal agents raided them and confiscated a small amount of marijuana worth, at most, a few hundred dollars. Criminally, this would have been treated as a youthful first transgression of a few teenagers. But under the seizure laws, the police took the fraternity houses themselves, which were worth about one million dollars.

In Iowa, a woman accused (not convicted) of shoplifting a $25 sweater saw her $18,000 car seized as the potential “getaway vehicle.” In Portland, Oregon, the police raided a bar and arrested a bartender (not the owner) on suspicion of bookmaking. There was zero evidence pointing to the bar owner’s involvement — the police documents didn’t even mention him. But the police seized his business anyway. The deputy district attorney in charge said she didn’t have evidence to press criminal charges against the owner “so we seized the business.”

These seizures are legalized theft by those who are supposed to be upholding the law, and give you a hint at the mindset of government agents, bureaucrats, and the police today. Justice is out — plunder is in!

Probable Cause

The government or police do not have to show any more than “probable cause” that a crime has been committed — the same standard which for centuries has been applied to search warrants. So the police can now seize your home with no more evidence than it once took to search it. . . .

Bill Munnerlyn, recently profiled on 60 Minutes, used to own a Las Vegas air-freight service. But on October 3, 1989, Bill flew an old man and four padlocked blue plastic boxes to a California airport. Unknown to Bill, his passenger was a convicted cocaine trafficker, and the boxes contained nearly $3 million cash from a drug deal. An informant tipped off the DEA as to the nature of the cargo and passenger, and both the passenger and Bill were arrested upon arrival. The jet, the blue boxes, and even $8,500 in cash Bill’s passenger had paid for the flight were seized.

Bill was released three days later with no charges, but the DEA kept the plane, and the U.S. Attorney prosecuting the seizure said it was justifiable because the plane flew into the Los Angeles area, which is “known as a center of illegal drug activity” and that was sufficient “probable cause” to seize the plane. In October 1990, Bill took the government to court and won a jury trial. But the judge overturned the jury’s verdict.

The DEA then demanded that Bill pay a $66,000 fine (which he did not have) to get the plane back. Meanwhile, the plane had incurred $50,000 in damage while in government custody. In the meantime, under DEA pressure, the FDA revoked Bill’s flight certificate. Bill never got the plane back. His business is gone, and he now drives a truck to support his family. But the informant whose tip led to Bill’s jet being seized is eligible for a reward up to 25% of the value of the plane.

According to a recent article in USA Today, in 1992, 65 informants made over $100,000 each by simply alleging to police agencies that their friends, neighbors, and/or business associates had committed crimes. And no, when you go to trial, you don’t have the right to confront the informant in court. The reason: it’s a civil, not a criminal proceeding.

To seize your property, the government need not accuse you of a crime. All that is necessary is that the judge agree with a prosecutor that “probable cause” indicates that a crime was committed in or on your property. Or a policeman, or sheriff, or federal drug agent can make that determination on the spot and seize your car, your boat, your home, your bank accounts, etc. According to the Pittsburgh Press, over 80% of the victims of 25,000 such seizures they analyzed were never accused of any crime. . . .

A growing number of our police and government officials no longer necessarily represent justice and protection, but are being corrupted with their new loot; and everyone is beginning to be suspicious of everyone else, and especially of the police and government officials — a growing number of whom are beginning to look and act more like their Gestapo and KGB counterparts every day. This is not the America I grew up in. Welcome to the U.S.S.A. — a branch of the New World Order.

Mr. McAlvany is an investment newsletter writer. This is an excerpt from the January 1993 issue of The McAlvany Intelligence Advisor, P.O. Box 84904, Phoenix, AZ 85071.

Reading List

Prepared by Richard M. Ebeling

Austrian economics is a distinctive approach to the discipline of economics that analyzes market forces without ever losing sight of the logic of individual human action. Two of the major Austrian economists in the 20th century have been Friedrich A. Hayek, who won the Nobel Prize in Economics, and Ludwig von Mises. Posted below is an Austrian Economics reading list prepared by Richard M. Ebeling, economics professor at Northwood University in Midland and former president of the Foundation for Economic Education and vice president of academic affairs at FFF.